The twelfth largest in the world and third largest in Asia, Indian chemical industry has not received fair treatment in a policy prepared by Government's working group on the chemical industry for the 11th Plan.
$35-billion industry, which has a contribution of 3 percent in India's GDP and employs more than one million people, has many constraints.
Free Trade Agreements with several countries are major obstacles as with reducing duty differentials and appreciation of rupee, it would be hard to compete globally.
Moreover, there are segment-specific issues. The dyes and dyestuff industry and the pesticide manufacturers have to undertake R&D for product differentiation.
Dyes and dyestuff industry, with strong presence in Maharashtra and Gujarat, is fragmented owing to excise concessions for small scale units introduced in the 1978 budget.
There are about 50 dyeing units in the organized sector and 900 in the SME sector but the installed capacity is just 1,50,000 tons a year. While in China, only 500 units have installed capacity of 8 lakh tons and produce around 6 lakh tons a year.
Small units are finding it difficult to comply with environmental norms and this has resulted in closure of many units in recent times.
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-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
